Three overriding concerns weigh on the merchant acquiring industry today: regulation, economics, and technology.
Boston, MA, July 21, 2010 – A new report from Aite Group reveals the key challenges facing the merchant acquiring industry today. Based on surveys and interviews with merchant acquiring executives, conducted primarily in-person at the Electronic Transactions Association (ETA) Annual Meeting in Las Vegas in April 2010, the report examines new technologies and sheds light on three trends that will shape the industry in coming years: regulation, economics, and technology.
Sixty-one percent of respondents viewed regulation as the top challenge facing the industry, referring specifically to PCI compliance and federal and state mandates. Compliance with this new legislation will be very costly for merchant acquirers to implement. Half of the surveyed population named economic factors as the second most important issue, and 63% ranked technology as the third major industry hurdle faced by merchant acquirers in 2010 and 2011.
“The acquiring industry has faced some turbulent times over the last two years,” says Adil Moussa, analyst with Aite Group and co-author of this report. “The state of the economy, increased competition, regulatory changes from U.S. federal and state governments, and PCI compliance have all contributed to market changes that merchant acquirers have struggled to address. There are, however, steps the industry can take to ease the burden of meeting new challenges, among them stepping back and reassessing its focus on certain elements, like mobile technology, which has taken up more resources than demand warrants. The industry should also give serious consideration to enacting industry standards for security issues.”
This 20-page Impact Note contains 12 figures. Clients of Aite Group's Retail Banking service can download the report.